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'Era of cheap oil is over'
02/04/2006 18:51 - (SA)
Algiers - Hope of rescuing Africa from poverty may vanish like "snow in sunshine" if high oil prices continue, the 53-nation African Union (AU) said on Sunday.
Alpha Oumar Konare, chairperson of the AU Commission, told an
African oil and gas conference the continent's new dreams of
development, inspired by a recent rise in aid, greater foreign
investment and fewer wars, were at risk from $60 a barrel oil.
"The era of cheap oil is over," he said. "What then becomes
of our ambitions and our dreams to see Africa take the path of
harmonious development?"
"Isn't there a risk of seeing these hopes melt like snow in
sunshine if the burden of the fuel bill is allowed to continue?"
Konare, a former president of Mali who is now the AU's top
civil servant, said African countries tended to spend a far
greater proportion of their national income on energy imports
than rich nations.
"That cannot be without consequence on the rate of growth of
these (African) countries," he said.
"The burden of refined product imports is a serious prospect
for the future of non oil producing countries," he said, noting
that Africa imported 57.6 million tonnes of fuel in 2004.
"At the current price of about $60 a barrel that is about
$23bn, a figure which represents more than half of the
debt recently cancelled for the 18 most indebted countries."
The AU in January agreed to set up an African Petroleum Fund
- a pot of money contributed by African oil exporters - to
help African oil importers fund some of the cost of fuel
imports, but no details of how the scheme would work have been
published.
Konare said setting up the fund was not going to be easy,
but the need for some sort of relief was evident.
"Isn't it clear that if nothing is done soon to help African
importers cope with this strategic development, they will be
able to guarantee neither the supply of oil nor their payment
for it, for want of sufficient reserves of foreign exchange," he
said.
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